FxWirePro: GBP/AUD buoyed by unexpected rise in UK inflation, good to buy on dips

• GBP/ AUD rose towards 1.9385 on Wednesday as pound was buoyed by UK December inflation data that surpassed earlier forecasts.

• Official data revealed that the annual consumer price inflation rate in Britain surged to 4% in December, up from November's 3.9%, which had marked its lowest point in over two years.

• Markets currently see a 16% chance of the BoE cutting rates in March, down from 28% at Tuesday's close. The chance of a BoE rate cut by May has also fallen to 60%, from 80% at Tuesday's close.

• Technical signals show the pair could gain more ground in the short-term as RSI is strongly bullish at 74,while moving averages and MACD are trending higher.

• Immediate resistance is located at 1.9397( Daily high), any close above will push the pair towards 1.9489 (23.6%fib).

• Immediate support is seen at 1.9319 (38.2%fib) and break below could take the pair towards 1.9236 (Oct 23rd low).

Recommendation: Good to buy around 1.9360, with stop loss of 1.9250 and target price of 1.9450